As an increasing number of businesses and organizations are realizing the value of accepting transaction instruments (i.e., charge, credit, debit, stored-value and gift cards, fobs and the like) for payment, the network infrastructure employed to transport transactional data both to and from the issuers of such instruments has become more burdened. Ensuring that these networks remain operational and efficient is vitally important to the profitability of both merchants and issuers as well as to the convenience of the consumers.
For many years, merchants did not have an available system for real-time transaction instrument (e.g., card) approval. In other words, an efficient infrastructure did not exist to enable a merchant to automatically determine whether a card had an appropriate available balance or credit line, or whether the card was actually valid. Instead, the merchant would place the customer's card onto a device which served to press an imprint of the card's numbers onto a carbon covered slip of paper. After signing the charge slip, the merchant would issue the carbon copy to the customer while the original would be submitted to the issuer of the card for payment.
Later, point of sale devices were introduced which allowed merchants to swipe a card through a magnetic strip reader or key in the numbers manually. This device would then establish communications with an authorization system of the issuer via a telephone connection and upload data relating to the transaction instrument and purchase to the issuer's approval system. If the card account included a sufficient available balance or credit line, and was not suspended due to, for example, lack of payment, the issuer's authorization system would send an authorization signal to the merchant's device and the merchant would consummate the sale. While this solution provided the merchant with assurance that the card was valid, receiving an authorization was often slow and unreliable.
Today, dedicated high-speed networks exist providing merchants with continuous access to the issuer's authorization system. Modern POS networks have reduced authorization time by eliminating the need for the POS device to establish a modem connection with the issuer. However, the down side is that if the POS network fails for any reason, merchants along the network are unable to process transaction instrument-based transactions until the network is activated again. Further, in order to utilize the network, merchants need to have a dedicated service in order to connect to a boundary device which is, in-turn, connected to the issuer's network. However, the dedicated service significantly increases the cost of connectivity.
While the current technology has improved transaction instrument processing, the technology may not be available for merchants residing in areas where the high-speed network infrastructure does not exist. Further, for mobile merchants (e.g., auto shows, craft shows, auctions, etc.), this option would simply not be practical. To address this problem, merchants may now employ POS devices which utilize a wireless connection to a POS network. However, like cellular technology, the range of such devices is limited.
Therefore, a need exists for a system and method to reduce the cost of dedicated services to merchants, while providing a more reliable network with multiple paths to a POS controller. Further, in order to accept card payments, some businesses in remote areas (where dedicated services are not readily available and where wireless POS devices are often out of range from the POS controller) have no other option than to employ either the old carbon copy process or utilize a modem connected POS device. There is a need to enable remote merchants to connect to a POS controller through a series of other merchant's POS devices, which are progressively closer to the POS controller.